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As we begin the New Year there are several pieces to the real estate and mortgage market puzzle that I think will be helpful to home buyers, sellers and home homeowners. Let’s start with the $8000 Federal Tax Credit. The credit is limited to 10% of purchase price not to exceed $8000 and the purchase price cannot exceed $800,000. In other words, if you pay $810,000 for a home, no tax credit, buy it for $800,000 and you may qualify for an $8,000 federal tax credit. As amended and expanded, the Tax Credit can be used by first time homebuyers and, with some restrictions, by move up buyers as well. To qualify, the sale must be in escrow by April 30 and close by June 30. The tax credit can be used for the tax year 2009 or 2010 and does not need to be repaid as long as you meet the requirements. Your REALTOR® or Tax Advisor can give you all the details. And speaking of tax credits, the Governor has proposed an extension and expansion of the 2009 state tax credit for California that was limited to new construction purchases only. The $100 million allotted in the 2009 program was gone within five months. The proposal put forth in the Governors state of the state address would be for all homes, not just new construction and $2billion would be allotted for the tax credit by the state. Remember, it just a proposal and must be approved by the somewhat contentious California Legislature. Rates continue in an historic low range, so really there is nowhere to go but up. Rates jumped up at year end, however have drifted back down this past week. The long term consensus is that conforming rates will rise to 6% by the end of 2010, which is still low by historical standards. There are three primary categories of conventional loans today. For conforming loans up to $417,000, rates are very near 5% on single family homes. The second category is high balance conforming loans up to $729,500. This segment runs .375% to .50% higher in rate than conforming. Today, that would be the mid 5%’s or slightly less. And then we have Jumbos. Lenders offering competitive jumbo financing are few in number. At best add .375% to .50% to the high balance conforming rate or somewhere between 5.75% and 6% for a 30 year fixed rate. The best rate in any category is with at least 20% down on a single family with credit scores above 720. FHA Loans are available up to $729,500 with as little as 5% down and scores in the mid 600’s. You may have heard that pending home sales have increased for 9 months in a row until November. As expected the number of pending contracts fell as buyers waited for the federal tax credit to be renewed. This chart shows the history of pending home sales going back to 2003. Red reflects contractions and green, expansions. While it is expected that the pending home sales will continue to expand, the expansion may be negligible in December and January due to the holidays. This chart reflects further indication that the bottom of the market was a little over one year ago. A question that comes up, especially with first time home buyers, is “how should I take title”? To shed some light on that subject I’ve put together helpful tips in the Quick Links Section of our Resource Center Home Page. Quick Links are located in the right sidebar at the top of the page. In these complex times, I am always available to answer your questions or discuss you concerns. Simply call, text or email me for a prompt response. Now, more than ever buyers and sellers will benefit from the advice and guidance that an experienced REALTOR® can provide. If you are in the San Francisco Bay Area, I invite you to start at our Resource Center, www.AboutBayAreaHomes.com. There you will find links for active home listings, including bank owned and short sales, home loans, market activity reports, home seller strategies, staging and decorating, a suite of 19 calculators, plus my book, “Let’s Make a Deal, The insiders Guide to Buying and Selling Real Estate” and more. Of course I am always available to discuss your real estate or mortgage related questions or concerns, just call, text or email me for a prompt response. Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients in San Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties. Licensed as a Real Estate Broker by the California Department of Real Estate, 01264240.

As 2009 comes to a close best wishes for a happy, peaceful and prosperous new year. One of my blog goals is to keep you up to date with what is really going on in the real estate market.

Earlier this month I alerted a buyer client that this home was a new listing. As you can see, this is a cute vintage home with great curb appeal. Looking at the interior photos reveals a traditional home built in the 1930’s.

The list price was in the low $700,000’s. The appealing look of the home and that price was the first indicator of what was coming. As I expected, my client wanted to see the home the next day, which was Thursday. Broker Tour was scheduled for Friday and both Saturday and Sunday open houses were on the calendar as well. Offers were scheduled for the following Wednesday.

The home was originally built as a two bedroom one bath. Over the years a third bedroom and bath had been added in the attic and a family room addition was built at the back of the home. The home’s interior condition is what could be called “vintage”. In other words it need compete updating, plus the additions created what is called “functional obsolescence”, although some might call it “funky”. To create stairway access to the attic bedroom a kitchen wall had been removed. Now there was no room for the refrigerator in the kitchen so it was located in the laundry area, which also served as the back porch and led to the upstairs staircase. The entrance to the “family room” was through this combination back porch, laundry, staircase area.

Turns out that there were nearly 500 people through the open houses over the weekend and by Tuesday there had been 80 disclosure packages downloaded and the listing agent had 15 confirmed offers.

Since my client wanted to make an offer we determined that the best shot would be their “highest and best “offer up front. This turned out to be $202,000 over the asking price, a 30 day escrow and a five day inspection contingency period. Of course, they already had their loan approval.

There were at least 20 offers and my clients offer was not the winning offer. I strongly believe (although it is not confirmed) that the home went for well over $1million.

The lessons for sellers; picture perfect presentation and pricing at the low end of the value range is what will get you top dollar in the shortest time.

For buyers; a new listing that gets your attention with price and presentation will get the attention of others. Despite what you’ve heard, there are plenty of qualified buyers and inventory is low. Be prepared to be in a competitive situation and make your “highest and best’ offer first because you probable will only get one chance. Another strategy is to look for homes that have “aged” on the market due to cosmetic appearance or high pricing. Over time sellers become more realistic about price.

Now, more than ever buyers and sellers will benefit from the advice and guidance that an experianced REALTOR® can provide. If you are in the San Francisco Bay Area, I invite you to start at our Resource Center, www.AboutBayAreaHomes.com. There you will find links for active home listings, including bank owned and short sales, home loans, market activity reports, home seller strategies, staging and decorating, a suite of 19 calculators, plus my book, “Let’s Make a Deal, The insiders Guide to Buying and Selling Real Estate” and more. Of course I am always available to discuss your real estate or mortgage related questions or concerns, just call, text or email me for a prompt response.

Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients in San Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties. Licensed as a Real Estate Broker by the California Department of Real Estate, 01264240.

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1. Interest Rates – Bankrate recently reported, that mortgage rates are at their lowest point ever in their survey taking history. They have been conducting rate surveys since September 1985. The national average for a 30 year fixed rate mortgage is very near 5%. This is great news for buyers. If you read or listen to the news, you will see that refinancing has increased dramatically. Why do you think this is? As I’ve mentioned, I am working on several refinances and have locked rates under 5%. Any further rate drops are likely to be minimal. One thing that you can count on, when rates begin to rise, they go up much faster then they go down. The current interest rate alone, is a really good reason to consider purchasing a home.
2. Housing Prices – Everyone knows that housing prices are down in most regions. Do you think prices are going to continue to decline? Perhaps, but most of the decrease is now reflected in today’s prices. Two good reasons to buy.

3. Seller Motivation – Due to the current market conditions, it is pretty easy to identify motivated sellers. In many instances, you can easily find a motivated seller by looking at the property description. Look for keywords such as: “motivated seller,” “make an offer,” or “must sell.” Be sure your agent is on the lookout for consistent price reductions. If you like the property and the seller is motivated, then you should seriously consider making an offer. If you don’t, chances are someone else will and you will have missed your opportunity. Don’t let happen to you.
4. Tax Advantages – Current tax law allows homeowners to deduct interest paid on mortgages and the amount of paid property taxes. If you are paying rent, you do not qualify for these deductions. The federal and California State governments are also offering incentives. The most widely publicized are the Federal $8,000.00 first time home buyer tax credit and the California $10,000 tax credit for a new home purchase. This makes a great opportunity even more incredible. You can find more information at our resource center, www.bayareateamonline.com.
5. Timing – You must have heard the expression “buy low and sell high,” right? It might even be your mantra. As with any investment, it is ideal to purchase when prices are low rather than at their peak. However, if you are waiting to purchase a home because you believe prices will continue to drop, you will likely miss out of an ideal opportunity. The time to “buy low” is right now. Once everyone comes to the realization that prices may already be at their lowest point, then you can rest assured that buyers will jump in and start buying. It might not be a mad rush anytime soon, but the best deals will be the first target.

Now you know, this is a great time to buy a house. There is plenty of inventory, interest rates are low, house prices are down, sellers are motivated, you can take a tax deduction and you may qualify for up to $18,000.00 in tax credits. The timing is perfect. You have nothing to lose and so much to gain.

To further assist you, we’ve added two Rent vs Buy calculators to our Resource Center and
blog site….one is by Freddie Mac the other calculator is by Ginnie Mae. If you decide that buying in the San Francisco Bay Area makes sense for you, I can assist you with locating and financing your home. If renting seems like the right answer and you want to live on the Peninsula I can refer you to the best rental agent I know….

Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula communites of the San Francisco Bay Area. They have served clients in San Mateo, San Franicso, Santa Clara, Alameda and Contra Costa counties. Licensed as a Real Estate Broker by the California Department of Real Estate, 01264240.

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